Former PTSB chief being ‘singled out’ in tracker inquiry, hearing told

Examination to determine whether David Guinane and lender participated in a regulatory breach

Former Permanent TSB (PTSB) chief executive David Guinane is being “singled out” and subjected to an “unfair” process as the Central Bank pursues him for his alleged role in the industrywide tracker mortgage issue, his lawyer told a public inquiry into the matter that opened on Wednesday.

The inquiry, chaired by sole member, UK barrister Peter Hinchliffe, is looking into whether Mr Guinane participated between January 2009 and April 2010 in an alleged regulatory breach when the bank only offered a low, original tracker rate to customers coming off a period of fixed rates after they specifically requested it or complained about it.

By failing to extend the more favourable rates to similar customers who did not complain, PTSB – and, by extension, Mr Guinane – is alleged to have failed in its obligations under a general principle of the Consumer Protection Code 2006 to act in its customers’ best interests.

Mr Guinane, who worked for PTSB for more than 25 years and served as chief executive of the lender between November 2007 and February 2012, is the only known individual to have been pursued to date by the Central Bank for their alleged role in the tracker issue.


“Mr Guinane is now facing an allegation he participated in a contravention of an obscure and ambiguous interpretation of the 2006 code,” Paul McGarry SC, for Mr Guinane, told the inquiry in his opening remarks.

Mr Guinane contends that PTSB did not breach the code and that it is “unfair that the inquiry is taking place in 2024 when it is alleged the contravention took place in 2009 and 2010″, said John Breslin SC of the legal practitioner team supporting the inquiry.

The first day of public hearings, which are expected to run until March 15th, heard that PTSB stopped offering tracker mortgages, where rates are linked to the main European Central Bank (ECB) rate in July 2008, at a time when banks’ funding costs on internal markets were spiralling at the outset of the financial crisis.

The inquiry centres around a special condition – known as special condition 706 – contained in the paperwork of some PTSB tracker mortgages from when the bank first offered this product in early 2004.

This required customers, that moved for a period on to a fixed rate, to instruct the bank as they came off this rate to put them back on a tracker rate. Otherwise, they would default to a standard variable rate, the inquiry heard.

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Mr Breslin told the hearing that the ambiguous wording of special condition 706 raised questions in early 2009 about whether a customer looking to go back on to a tracker rate after a fixed period was entitled to revert to a tracker rate set at the original margin over the ECB rate, or a higher margin offered by the bank.

In January 2009, PTSB’s then head of marketing, Niall O’Grady, told Mr Guinane that internal legal advice proposed that only customers who complained about being put in on a higher margin – or actually requested the original margin – should be put on the more favourable rate.

Mr Guinane responded by email to an approach along these lines, put forward by the marketing department that month on foot of the legal advice, with the words, “okay with that”.

“It’s apparent from even those three words that Mr Guinane was following a recommendation that had been put together by others,” said Mr McGarry. “The person or persons who put together the information are not being pursued by this inquiry. Instead, Mr Guinane is being singled out.”

PTSB decided, however, in early 2010 to reconsider its position following engagement with regulators and went about remediating borrowers that had been affected by its previous stance, the inquiry heard.

The inquiry also heard that there is no allegation that either PTSB or Mr Guinane acted dishonestly. It is scheduled to hear from 12 witnesses before it concludes, including Mr Guinane.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times